Neste, Veolia, and Borealis have agreed to create a joint venture company to build a new combined heat and power plant and produce and supply steam and other utilities to Neste’s refinery and Borealis’ petrochemical plant in Porvoo, Finland. The company, Kilpilahti Power Plant Limited (“KPP”) will be owned 40 % each by Neste and Veolia and 20 % by Borealis. Neste will contribute its required equity share in KPP by transferring the current power plant to the joint venture company. The arrangement is subject to financing deals which are expected to take place during the first quarter of 2016. The plant is expected to be in operation during 2018.
KPP will build four new steam and power generation assets with an installed capacity of 450 MW thermal and 30 MW electrical running on side streams from the refineries as well as natural gas, with asphaltene being the main fuel. The total investment is expected to be around 400 million euros, of which an estimated 350 million euros is for the new power plant. The new power plant will comply with the latest environmental regulations, including the European Commission’s Industrial Emissions Directive (IED).
Veolia Services Suomi Oy, a subsidiary of Veolia Nordic AB, will take over the operating staff of the existing power plant from Neste and enter into a 20-year operations and maintenance contract with KPP for an estimated value of 350 million euros.